Amazon Settles Class Action on Returns

Sometimes it’s good to be six months behind the curve in blogging. You can blog and update your post in one go.

Back in April, a U.S. District Court in Seattle denied Amazon.com Inc’s motion to dismiss in In re: Amazon Return Policy Litigation. Under Amazon’s “advanced return policy,” a consumer receives a refund upon delivering the item to one of Amazon’s designate return facilities. However, if for some reason Amazon does not receive the item, it charges the consumer’s credit card a second time for the item. Plaintiffs alleged that they duly returned items to Amazon but were nonetheless charged. They sued, allenging breach of contract, violating the duty of good faith and fair dealing, violating the Washington Consumer Protection Act, money had and received, unjust enrichment, promissory estoppel, and conversion. 

Amazon moved to dismiss the quasi-contract and conversation claims. The District Court denied the motion with respect to both claims. Amazon sought to dismiss the conversation claim based on the “independent duty doctrine.” In short, plaintiff cannot sue for conversion on a claim arising from a contractual relationship absent an allegation that the duty not to convert property arose independently from the contract. The Court noted that Washington state courts have interpreted the independent duty doctrine narrowly, limiting it to claims arising out of construction on real property and real property sales. In any case, plaintiffs have alleged an independent tort. Contract or no, Amazon reached into plaintiffs’ bank accounts, took their money, and has continued to retain it. The independent duty doctrine does not preclude a claim for conversion in these circumstances.

Amazon also sought to discuss plaintiffs claims arising in restitution and promissory estoppel, which the Court characterizes as “quasi-contract” claims. While I don’t think a promissory estoppel claim is the same as a quasi-contract claim, the rest of the court’s reasoning seems right. Ultimately, a party might not be able to prevail in restitution or promissory estoppel where there is a contract between the parties, but parties can plead in the alternative, and so it would be premature to dismiss plaintiffs’ non-contractual claims on a motion to dismiss.

That was in April. Just last week, James Scarcella reported for Reuters that Amazon had settled the case. Mr. Scarcella notes that Amazon also agreed just last month. to pay $2.5 billion to settle an FTC case alleging that Amazon had engaged in deception by making its Prime subscription service hard to cancel.